An idea gaining ground among ordinary people is that “the internet” knows more about us than we know ourselves. Thanks to data collection and algorithms, it seems our every personal quirk and eccentricity is greedily gathered by unseen, faceless and mysterious cyber entities. Fintech (financial technology) describes a new technology that aims to improve the delivery and use of financial services, helping businesses and consumers better manage their financial affairs, through software and algorithms. The term emerged in the early years of the 21st century, and now covers sectors including retail banking, education, fundraising and investment management – and millions of day-to-day transactions via smartphones. On the face of it, fintech seems to offer ways of obtaining money without the traditional chore of having to sit in front of a bank manager while he trawls through your credit history. But cautionary tales abound. There is the story of the FT reporter who ended up with a bill for several hundred pounds after “buying” a £1.50 bus ticket via her smartphone, only to find the phone had run out of juice – just as she was approached by a ticket inspector. Or the more worrying trend of poorer people being enticed into the digital world of money-lending and finding themselves in debt, with a negative credit rating – without ever having an interaction with another human being. Traditional banks, noting the fintech trend, appear to be chasing the game. Fintech companies are moving into the big time. Many British fintech companies are turning over millions a year. They make their profits by unbundling conventional offerings, using technology to be more efficient, cutting down on costs associated with transactions. As a disruptive technology, fintech could be seen to be simply democratising the financial world for the individual, and indeed, traditional companies like Goldman Sachs have recently pledged to keep pace with the new fintech companies. They, and other traditional, desk-based organisations, will not only need to invest in the technology, but be ready to adopt a more flexible approach to business.

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